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Determining unit sales level for Herald Company

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The Herald Company manufactures and sells a single product that sells for $50 per unit and has a contribution margin ratio of 30%. The company's monthly fixed expenses are $25,000. If Herald desires a monthly target net operating income equal to 20% of sales dollars, sales in units will have to be:
2,500
5,000
1,666
1,000

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Solution Summary

The solution calculates the unit sales level for The Herald Company.

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The contribution margin is
CM = Price * contribution margin ratio = 50 ...

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